Pivotal vote on Detroit bankruptcy plan to conclude this week

DETROIT, MI -- Nearly a year after the city filed for bankruptcy protection and dove into tense negotiations and court proceedings over how to address $18 billion in debt, a pivotal vote on the plan that was crafted is set to conclude this week.

Approval or rejection from Detroit's employees and retirees could determine how quickly the city exits bankruptcy and how deeply the debt adjustment plan cuts pension checks.

City creditors have been casting ballots for two months and the deadline for final votes is Friday.

If employees and retirees approve the plan, non-uniformed retirees would take 4.5-percent cut to their monthly pension checks and lose annual cost-of-living increases, while former police and firefighters would lose only a portion of the annual increases.

Some who invested in annuity funds that city officials say offered fixed interest rewards that were too generous would also be subject to renouncement that could deepen the cuts to pension checks.up to 20-percent.

If it's rejected, Detroit Emergency Manager Kevyn Orr has been warning, they could lose up 30 percent, if U.S. Bankruptcy Judge Steven Rhodes agrees to impose the cuts on them.

But rejecting the plan would also allow them to continue to fight the pension cuts, which are banned under the Michigan's constitution.

Rhodes ruled last year that pensions could be adjusted in federal bankruptcy court despite the state law.

Approval of the debt adjustment plan would cost retirees the right to continue to challenge that decision in courts.

Several groups representing retirees have urged a "yes" vote, warning of worse results that could come with rejection.

A coalition of charitable foundations pledged $466 million and the state approved $194.8 million in a settlement known as the Grand Bargain that would keep the cuts to 4.5 percent while protecting the Detroit Institute of Arts collection if employees and retirees approve the plan.

But some remain adamant against it.

A group protested outside Detroit's federal courthouse last week.

Retiree Cecily McClellan, 61, told the Associated Press she voted "no," despite what she calls a political-style campaign to sway her and other retirees.

"I've never seen anything like it in my life," said McClellan, who worked 24 years in the city's human services and health departments. "I think this is coercion, intimidation. This is fear-mongering."

Others, however reluctant to give up part of their pension, voted "yes" to put an end to the matter with less painful cuts.

"If I took a chance on not voting at all or voting no, they would have been able to take whatever they want," said Retiree Renetta Major, 53, of Southfield after begrudgingly voting last month.

She said she did janitorial work for the city for 11 years before retiring due to illness. She currently collects a $612 monthly pension check.

"I didn't work as long as them, but I'm thing about the ones who put in 30 years," she said. "You were told that you work 30 years and you've got something down at the end of the tunnel for you, and you find out they're going to take some that... I have a problem with that."